Aviation & Brexit 88

Tuesday, 23 July draws closer and the naming of a new UK Conservative Party leader and subsequently a new UK Prime Minister (PM).   It seems increasingly likely that the Conservative Party is going through the motions with only one outcome on the table: Mr Johnson gets selected and then pushes, in whatever ways possible, to get the UK to leave the European Union (EU) by Halloween this year.  Little, if anything is new as repetitious and shallow arguments get thrown around like confetti for the bride of Frankenstein.

In the early months of this year there was a flurry of detailed articles written about how aviation would be affected if the UK left the EU with or without a deal.  The common expectation was that the transition would start at the end of March.  Since then a few have taken the time to update their positions but most of what was written remains motionlessness.  Without a sense of political direction advancing policy positions is a precarious activity.  However, a high-level desire to see liberal aviation market access arrangements continue does seem to exit within both UK and EU.  To that extent, a No-Deal Brexit outcome represents a big step backwards for all Europeans.

Although it’s not relevant to international air travel, it’s notable that British media interviews continue to focus on The General Agreement on Tariffs and Trade (GATT).  The GATT was the precursor to the World Trade Organisation (WTO).   Article 24 is being cited as a universal solution to objections to a No-Deal Brexit.  However, this proposition has been debunked multiple times and doesn’t stand scrutiny[1].

[1] https://fullfact.org/europe/gatt-nine-lives-article-24-again/

In recent weeks, talk of international companies planning relocate their operations to other parts of Europe[1] has not phased the populist proponents of Brexit.  Thus, it’s vital for businesses to plan for a No-Deal Brexit where only temporary provisions will exist between the UK and EU.  However, reports show that the UK is still not prepared for a No-Deal Brexit in October.

For aircraft design and maintenance and pilots and cabin crew, there may be no sustained mutual recognition between the EU and the UK for aviation licences, approvals and certificates.  In addition, the UK will no longer benefit from EU Bilateral Aviation Safety Agreements (BASAs).

Mounting concerns are being voiced about the prospect of a No-Deal Brexit and the subsequent impact on aviation and the traveling public.  To date, Conservative and Labour Party leaders would rather sweep such concerns under the carpet.

The online help from the UK Government, the European Commission (EC) and on the CAA and EASA Brexit microsites remain the best available information.

[1] https://www.chathamhouse.org/expert/comment/japanese-warning-over-fallout-hard-brexit-not-idle-threat

 

Aviation & Brexit 86

A new Conservative Party leader should be named on Tuesday, 23 July and then appointed UK Prime Minister (PM) one day later.  That’s only if the Government’s majority in the UK Parliament hasn’t crumbled.  Then the House of Commons (HoC) summer recess begins one day after[1].  The HoC returns on Tuesday, 3 September just before the political Party conference season gets started.  So, the idea that there’s time to apply Article 50 and negotiate a new deal with the European Union (EU) before the 31 October exit day is pure fantasy.  If there was unity, harmony and a convergence of positions then a small chance exists.  None of those three words can reasonably be used to describe the situation.

A lot of political talk still centres around the World Trade Organisation (WTO) and peculiar notions that it might be easier to get a deal with over 160 Countries than it is to deal with 27 Countries.  The WTO framework doesn’t cover key aspects of the UK economy, like: Aviation, Medicine, Export Licencing and Digital Data.  Often expressed as a sign of more “Unicorns”, frustration continues to grow amongst those who have gained a smattering of knowledge after 3-years of this merry-go-around.  As a result of all the nonsense spoken, there’s little doubt that Brexit is damaging the UK’s reputation as a good place to do business.

If Boris Johnson enters Number 10, Downing Street as PM then he could discard his firm promise to leave the EU, come what may on 31 October only then to see his Government fall.  Thus, the strong likelihood of a “No Deal” outcome with no implementation/transition period is looming.  Without a formal withdrawal agreement there’s only the temporary contingency measures that both the EU and UK[2] have published so far.   I’ve written about this in my Blog 61, 71 and 74.

One area of significance is how this event will impact aerospace Design Organisations (DO) who are primarily based in the UK.  Approvals issued by the European Aviation Safety Agency (EASA) to a UK DO, before the exit date will remain valid for 9 months from the day after the 31 October. To provide continuity, UK DO’s are being encouraged to apply to the UK Civil Aviation Authority (CAA)[3] for a national approval in advance of the exit day.  One small silver lining is that the UK CAA will not charge an up-front fee for issuing these approvals, provided the scope is the same as the EASA approval and no technical investigation is required.  After that a fee is changed for surveillance of the DO approval under a published scheme of charges.

This is one subject area amongst a large number, across many industries.  Yes, Brexit is a magnificent way to create extra bureaucracy and we will all end up paying for it in the long run.

[1] https://www.parliament.uk/about/faqs/house-of-commons-faqs/business-faq-page/recess-dates/

[2] https://www.gov.uk/guidance/prepare-to-work-and-operate-in-the-european-aviation-sector-after-brexit

[3] https://info.caa.co.uk/eu-exit/aerospace-design-organisations/

Aviation & Brexit 84

Of all the political cartoons now on display, one of the best shows a British red bus at the bottom of a ravine[1].   Having sailed off the top, and into a deep gorge it’s resting, all crumpled at the bottom.  Out of a front window is a speech bubble with the words: “I think we need to change the driver”.  That nicely sums up the UK’s predicament.  No attempt to recover the bus’s situation as the obsession is to find a new driver.  Thus, I struggle to know what to write.  Or at least, what to write that is not part of the echo chamber centred on who is be the next UK Prime Minister.  However, the message is clear; very few of the intractable problems they we face have changed in the last 3-months.   By the way, there are an enormous number of uncomplimentary Brexit cartoons that feature big red buses.

It was a year ago the UK Government published some slides called the: ‘Framework for the future UK-EU partnership[2]‘ for transport.   I must take it that these slides remain applicable.  That means the UK wishes to continue to explore possible terms for participation in the European Aviation Safety Agency (EASA).

I have just come back from attending the 2019 EASA – FAA International Aviation Safety Conference in Cologne, Germany.   More than 350 participants from all over the globe converged on Cologne for the 3-day event.   I think there was about 40 Countries represented.   The Countries of Europe, and the rest of the world, have a permanent common interest in civil aviation safety.   Recent events have focused minds on that ever-present challenge as yearly passenger numbers reach 4.6 billon[3].

In the time that EASA has been around, that’s 15-years, the number of scheduled passengers handled by the global airline industry has increased in all but one year.   That’s enough to concentrate anyone’s mind about safety but it also raises many questions about the environment and aviation security.

What I’m going to say now is entirely predicable and consistent with everything I’ve written so far.  Working together in this region of the globe makes huge sense.  No one Country is going to sort out safety, security and environmental challenges by themselves.  In fact, if we can’t make good progress here in Europe it would seem doubtful that we could make progress in any world region.

At the start of what’s a new session for the European Parliament, I hope that enough politicians are motivated to burst out of the negative impasse that trouble us all.  There’s a leadership role for Europe.  It only needs the will to take it.

“Good planets are hard to come by. Please think of our environment before you print this Blog.”

[1] https://www.cairnstoon.com/

[2] https://www.caa.co.uk/Our-work/About-us/EU-exit/

[3] https://www.statista.com/statistics/564717/airline-industry-passenger-traffic-globally/

 

Aviation & Brexit 81

It’s about a month ago since I last wrote.  This has been a busy month.  European Parliamentary elections took place on Thursday in the UK.  The results of those elections will not be known until late on Sunday.  A long process of local and regional counting will take up most of Sunday.  What it will mean in the UK is still unclear but at least these were real votes in real ballot boxes.   The outcome of which should be a sound indication of the current public mood.

The UK is now in the position where if it ratifies the existing EU-UK Withdrawal Agreement (WA) before 31 October 2019, an EU withdrawal will take place on the first day of the month following the completion of the ratification procedures.  However, there are no signs that national ratification is on the cards.  The UK’s two largest political parties have given-up on negotiations to come to a compromise on Brexit.  This should be no surprise since a deal between the Conservatives and Labour would still have to pass the through a grid-locked House of Commons (HoC).  A compromise involving the UK staying in a Customs Union (CU) is more than the hard core Brexit supporting Conservatives can accept.  Now, as if the above wasn’t enough, the UK’s Prime Minister is stepping down.  A starting gun has been fired on a that leadership race and it’s unlikely to be helpful to any potential political compromise.

The Brexit stasis continues to have a pressing and disruptive impact on the aviation and travel industries.  Recently, the travel firm Thomas Cook reported a £1.5bn loss for the first half of the year[1].  Behind this were several factors but one of the bigger ones was potential customers putting off their summer holiday plans.

With Brexit delayed until later this year, the UK is exporting people.  Now record numbers are applying for Irish passports[2] and that may give a boost to aviation in Ireland.  As an indicator, I’ve had a conversation with a person prepared to relocate his businesses if Brexit remains unresolved.

In the technical regulation arena, the objective would seem to be to maintain as much continuity as possible[3].   Our international rules-based system assumes that Countries will work together to improve conductivity.   But the situation remains fluid between the UK and EU, and there are still big questions to answer before we reach 1 November 2019.

The power-play going on between US and China is not a good background in which to continue with the uncertainty of Brexit.   The UK should be defending multilateralism in this situation.  A choice needs to be made since the UK’s aviation future need not shift from an influential rule-maker into a rule-taker.  In this region, retaining membership of EU Agencies, like EASA remains a viable option.

Brexit is now in a go / no-go position.  I’m more of the opinion that the project must be terminated and quickly.  Even if it is not, close alignment with the EU still has major benefits.   Is there the political vision in the UK to steer Brexit to a conclusion?  It’s going to be well into July 2019 before we even have a hint as to the answer to that question.   3-years since the UK referendum and its only uncertainty that is certain.

[1] https://www.bbc.co.uk/news/business-48292318

[2] https://www.irishpost.com/news/how-to-get-irish-passport-166453

[3] https://ebace.aero/2019/news/latest-news/ebace2019-session-looks-at-impending-brexit/

 

Aviation & Brexit 80

It’s a week ago since I last wrote.  It’s been the week of Easter.  Politicians took time off and the news cycle found new stories to cover including exceptionally warm weather.   In terms of progressing towards a solution to the Brexit crisis nothing much happened.  Or at least nothing much happened in public.

Brexit continues to be a lose-lose proposition.  On both sides of the Channel the impasse rattles on.  All the energy absorbed by Brexit has weaken the economies of both the UK and the Continent.  CNN[1] recently reported that its China that is the big winner from Europe’s Brexit chaos.  That could well be the case, if not in the short-term then certainly in the longer term.

The European Parliament (EP) is now in recess until after the European elections at the end of May.  The new EP will be in place in July.  A new European Commission will be appointed.

This means UK holidaymakers will have to make a leap of faith if they are booking a beach holiday on the Continent this summer.  Since Brexit is delayed, but that could be cut short the assumption may be made that conditions remain; business as usual at least for a bit longer.

Since the referendum was first called in 2015 the UK pound (£) has fallen from roughly 1.4 Euro to the £ to its current rate of around 1.15 Euro to the £.   UK holidaymakers will need to take this into account when booking packages.  In all cases measures to keep aircraft flying will be in place but there’s a strong likelihood that higher fares and less choice are on the cards.

As a highly regulated industry the importance of what happens to regulatory relations matters a great deal.  Aviation cannot prosper without a mature and stable framework within which to operate safely.  All the international evidence points in that one direction.

The UK played a major part in the formation of the European Aviation Safety Agency (EASA), but it would seem to be stepping aside.  Regardless of what the UK does, EASA’s tasks within the EU-27 and its 4 associated countries will continue uninterrupted.   The UK’s possible withdrawal puts it in a difficult position with diminished influence.  Any withdrawal will significantly alter EASA’s cooperation with UK authorities.  Even in this peculiar situation there may still be a re-think but just now nothing remains untouched.

[1] https://edition.cnn.com/2019/03/27/europe/china-europe-brexit-italy-bri-intl-gbr/index.html

 

Brexit & Aviation 72

Last week, new implementing procedures agreed under a Bilateral Air Safety Agreement (BASA)[1] between the UK and US, were discussed with the aerospace and aviation industry at the Embassy of the United States in London[2].

In the event of a No-Deal Brexit the UK would not be able to continue to participate in the European Aviation Safety Agency (EASA) regulatory system.  However, the UK is saying that design validation processes will be “similar” to those implemented under the existing EU-US bilateral agreement.   Also, there will be continued acceptance by the UK and US of each other’s aviation maintenance approvals.

The UK is working on other bilateral safety arrangements with the aviation authorities in Canada and Brazil.  These are the major aircraft manufacturing countries that have a long history of cooperation on aircraft certification and maintenance.  The international Maintenance and Certification Management Teams (MMT/CMT), both of which consist of representatives from the National Civil Aviation Agency of Brazil (ANAC), EASA, the US FAA and Transport Canada Civil Aviation (TCCA), are taking steps to mutually recognise each others approved organisations.

The UK Government has published updated guidance for the aerospace sector and is preparing for EU Exit[3].  Clearly more import-export agents are going to be needed in the coming years.  Everyone is preparing for the commercial impacts on all the sectors of the aviation industry.   The political and economic uncertainty continues to be unsettling.

Despite all the preparations that have been made, the EU’s European Economic and Social Committee (EESC) has warned that a No-Deal Brexit could “jeopardise” aviation safety standards[4].  That said, current No-Deal Brexit proposals are just temporary solutions.  Only a comprehensive EU-UK agreement will ensure the seamless air connectivity air travelers have come to expect.

 

[1] https://www.flightglobal.com/news/articles/uk-and-usa-sign-safety-accord-to-apply-in-event-of-n-456652/

[2] https://www.caa.co.uk/News/UK-signs-post-EU-exit-air-safety-agreements-with-USA/

[3] https://www.gov.uk/guidance/the-aerospace-sector-and-preparing-for-eu-exit?

[4] https://www.theparliamentmagazine.eu/articles/news/no-deal-brexit-could-‘jeopardise’-eu-aviation-safety-standards

Brexit & Aviation 67

I must confess that the detail of aviation environmental policy is not my area of expertise.  Nevertheless, it’s a substantial subject and one of immense importance.  It’s best to note that environmental policy advances at international, regional and national level.  To be truly effective the framework for environmental policy must be adopted within the International Civil Aviation Organisation (ICAO).

This year is an important year for ICAO.   It’s an Assembly year.  Every 3-years an Assembly[1] comprised of all Member States of ICAO meets in Montreal.  During the first 75 years of its existence, ICAO has made an indisputable contribution to the development of worldwide civil aviation.  However, at previous Assemblies, ICAO has had immense problems reaching a consensus on environmental issues.

In the European Union (EU) its agency, the European Aviation Safety Agency (EASA) actively contributes to the ICAO Committee on Aviation Environmental Protection (CAEP) which develops and maintains the international standards for aircraft noise and emissions[2].

With Brexit looming, it remains to be seen what, if any role the UK will have in the future in the development and maintenance of environmental standards for aviation.  That said, there’s more to aviation environmental policy than technical standards.  There’s a useful European Aviation Environmental Report[3] that explains the various mechanisms that are being worked on with respect to aviation environmental policy.

One of the most controversial, for obvious reasons is that of market-based measures[4].  Market-based measures are mechanisms designed to tackle the climate impact of aviation, beyond what operational and technical measures or sustainable aviation fuels can achieve.

In October 2016, the 39th Assembly of ICAO States reconfirmed the objective of stabilising CO2 emissions from international aviation at 2020 levels.  From November 2018, 76 ICAO States volunteered to offset their aviation emissions from 2021 and this represents three quarters of the international aviation activity.

In Europe, the approach has been to adopt an Emissions Trading System (ETS).   ETS and offsetting schemes both address aviation emissions but differ in how they work.  Currently, only flights between airports located in the European Economic Area are included in the EU ETS legislation.  For the UK, the implication being that, post-Brexit it will no longer be covered by such EU legislation.

The UK Government is proposing statutory instruments, or secondary legislation on ETS before the exit date of 29 March 2019.   In the event of a disorderly (“No Deal”) exit from the EU, the UK would not have an agreement in place to continue participating in the EU ETS.  The UK would therefore leave the EU ETS on exit day[5].   The UK’s future approach to carbon pricing is to consider a range of options, including continuing to participate in the EU ETS, a UK ETS (linked or standalone) or a carbon tax.  If the far-right UK Conservative European Research Group (ERG) further get their hands on power there may be no measures on climate change at all.

This lack of clarity and direction are not helpful for aviation operators who need to plan.  With all the time that has passed since the vote it’s sad that all we know is the date of exit and even that is in question.

[1] https://www.icao.int/Meetings/a40/pages/default.aspx

[2] https://www.easa.europa.eu/sites/default/files/dfu/Opinion%20No%2009-2017.pdf

[3] https://www.easa.europa.eu/eaer/

[4] https://www.easa.europa.eu/eaer/topics/market-based-measures

[5] https://assets.publishing.service.gov.uk/media/5c0febf1ed915d0bd3e4da92/081118_MRV_Explanatory_Memorandum_FINAL.pdf

 

Brexit & Aviation 60

Delay is the order of the day.  Now, there’s only 56 days remaining on the Brexit clock.  859 days since this all started with a June day.  One silver lining to the current dark Brexit cloud is that the UK Parliament is saying it won’t support a No-Deal Brexit.  However, there’s nothing to relieve the uncertainty hanging over the whole UK because even this expression of view is being ignored by the UK Government.  The UK Government says it will now redouble its efforts to get a deal.  Let’s hope redoubling is enough or surely it would be wiser to drop the whole project.

EU Council President Tusk, through his spokesman repeated that the Withdrawal Agreement on the table could not be renegotiated.   Next, the 9th February will see Prime Minister May’s 3rd attempt at a version of a Brexit deal supported by the UK Parliament.  Will it be 3 strikes and you are out?

In the latest information to UK citizens travelling to EU Member States every aspect of the advice is a degradation of exiting conditions.  Travelling post-Brexit, there’s only a downside for both passengers and airlines[1].

If No-Deal comes about there’s some highly optimistic commentators who believe that a “side agreement” between the EU and UK could cover some of the purely administrative content of the existing Withdrawal Agreement.  That said, even with this practical suggestion absolutely nothing is assured.

In the aviation regulatory world, it’s reported that the UK Civil Aviation Authority (CAA) is in the process of rebuilding itself after scalling back following the creation of EASA in September 2003.  The UK CAA has said it wants to stay within the EASA system after the UK exits the EU.  However, this possibility is looking unlikly for all the political reasons that are piling up every day.  The UK’s exit from the EU will have a severe impact on the UK aviation industry.

In civil aviation, large organisations have an Emergency Response Plan (ERP).   International standards recommend planning.  It’s normal, once a plan is in place to conduct an exercise to ensure that everyone has a clear understanding of its process and it stands up to rigorous testing.   I’ve been part of several such exercises in Europe.  My experience is that even with the most elegant plan, carefully prepared, the real-life impact of using it is often incredibly revealing.  Situations are constantly evolving, and all parties must move rapidly in order to anticipate risks and adapt accordingly.  Often communication and behaviours turn out differently than expected.

Yes, on both sides preparations are being made for the worst case No-Deal scenario, but they will all be untested.  If more than one crisis occurs at any one time more than double the effort is needed to resolve the situation.   The implementation of any such No Deal plan will not be a matter for one organisation but a continent of 500 million people.   If anyone thinks that will go smoothly, I just have to say that they have no experience of the real world.

[1] https://www.aerosociety.com/news/no-deal-no-flights/

Brexit & Aviation 58

I must confess that I never thought that the situation would become as bad.  To a limited extent, it hasn’t yet got that far – yet.  Some have taken the view that a No Deal Brexit is off the table and exits only as a scary story to push discussions forward.  The problem is that this view is optimistic when considering the performance of the negotiating parties over the last couple of years.

The cold facts are that preparations for a No Deal Brexit outcome are being stepped-up.  Radical Leave supporters are celebrating the prospect of a No Deal Brexit.  This is done without any consideration of the consequences of such an irresponsible approach.

After the failed vote of this week we now have an elaborate lobbying exercise going on, but I don’t see compromise coming out of any cross-Party talks in Westminster.   It’s highly probably that the UK will be a “third country” without any extant arrangements or deals from 30 March 2019, 00:00h (CET).  With 70 days to go this is a tragic situation.

There’s an opportunity on this coming Monday for the UK Prime Minister to turn this around.  But it would mean removing “red lines” that have so constrained discussions.

In the airworthiness world the impact of a No Deal Brexit is being spelt out[1].  There’s no precedent for this situation.

EASA certificate for products, parts and appliances issued to holders in the UK will no longer be considered as certified in accordance with EU rules.

Certificates issued, before the withdrawal date by the UK CAA, in accordance with EU rules will no longer be valid.  Over night, UK engineers would lose the right to sign off EU aircraft.

There’s more that impacts aircraft operations.   I imagine this will prompt a stream of people and organisations contacting EASA to find out what can be done.  None of this work is productive.  None of this work will enhance aviation safety.  None of it would be needed if a comprehensive agreement is forged or Brexit is abandoned.

[1] https://ec.europa.eu/info/sites/info/files/notice_to_stakeholders_brexit_aviation_safety_rev1_final.pdf

 

Brexit and Aviation 47

The “Draft Agreement on the withdrawal of the United Kingdom of Great Britain and Northern Ireland from the European Union and the European Atomic Energy Community,” dated 14 November 2018 is now published.

Aviation gets one mention in the draft agreement “International Civil Aviation Organisation standards related to biometric identification.”   In relation to Agencies, such as EASA the draft agreement says: “The institutions, bodies, offices and agencies of the Union shall continue to be competent for administrative procedures which were initiated before the end of the transition period …”.

So, it’s business as usual until the end of the proposed transition period.  Naturally, that depends upon the draft agreement being passed into law.  In fact, there are three options that are the most likely.  One: enact this withdrawal agreement, two: reject the agreement and abandon Brexit or three: reject the agreement and crash out.

The first two options are practical and viable but the third is an utter catastrophe for all parties.  There are just two ways to prevent disruption and to provide legal certainty to air transport and aerospace, at least for the short-term.

The hard fought, detailed, lengthy and binding Withdrawal Agreement only addresses the next few years.  To accompany the agreement there is a political declaration on future EU-UK relations.  In that document there is a high-level commitment to regulatory cooperation.  There is a wish for a: Comprehensive Air Transport Agreement, covering market access and investment, aviation safety and security, Air Traffic Management and provisions to ensure open and fair competition.

Unfortunately, of all the debate and amassed documentation there isn’t much more than that simple statement.  In other words, there’s some indication of the direction of travel but nothing on what that might that mean for the next decade.  Today, the best deal remains the one the UK has as an EU Member State.

It’s true, that the EU-UK political declaration may still be expanded in the next few days. The political declaration could grow to 20 pages but that hangs in the balance.  Contrast that with the over 500 pages of the Withdrawal Argreement.  It seems odd that it has taken well over 2-years to get to this point.

In parallel, the European Commission is working with its Agencies.  EASA is processing applications from UK organisations in preparation for the time when the UK will not be a Member State.  In addition, it’s doing preparations for the worst-case scenario – No Deal

Clearly, based on the domestic political reaction, there is no guarantee what-so-ever the UK will ratify the Withdrawal Agreement by 29 March 2019.  Parliament remains divided.   Only a committed gambler would predict which way events will turn next.